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Discounted Cash Flow (DCF) Analysis Unlevered


Paychex Inc.

Paychex Inc. (PAYX)

Industrials

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 2,326.202,518.812,739.462,951.763,152.783,377.573,772.414,089.294,432.804,805.155,208.78
Revenue (%)
EBITDA 1,009.571,093.161,166.731,266.311,391.321,446.611,546.311,753.901,901.232,060.932,234.05
EBITDA (%)
EBIT 911.41988.131,060.171,151.191,264.261,308.471,364.861,583.781,716.821,861.032,017.36
EBIT (%)
Depreciation 98.17105.03106.56115.12127.06138.14181.45170.11184.40199.89216.69
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 505.48551.12536.66352.15323.48424.22763.16690.27748.26811.11879.24
Total Cash (%)
Account Receivables 133.29149.37176.69408.52507.60492.45826.91493.99535.48580.46629.22
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 42.8048.8651.7856.6757.0773.6375.8379.3386.0093.22101.05
Accounts Payable (%)
Capital Expenditure -98.63-84.13-102.73-97.70-94.27-154.02-123.74-148.85-161.35-174.91-189.60
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 85.13
Diluted Shares Outstanding 359.20
Cost of Debt
Tax Rate 24.39
After-tax Cost of Debt -1.17
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.70
Total Debt 809.40
Total Equity 30,578.70
Total Capital 31,388.10
Debt Weighting 2.58
Equity Weighting 97.42
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 2,326.202,518.812,739.462,951.763,152.783,377.573,772.414,089.294,432.804,805.155,208.78
EBITDA 1,009.571,093.161,166.731,266.311,391.321,446.611,546.311,753.901,901.232,060.932,234.05
EBIT 911.41988.131,060.171,151.191,264.261,308.471,364.861,583.781,716.821,861.032,017.36
Tax Rate 37.57%36.49%36.33%34.25%34.37%23.54%24.39%32.42%32.42%32.42%32.42%
EBIAT 569.00627.52675.01756.86829.691,000.501,032.021,070.311,160.221,257.681,363.32
Depreciation 98.17105.03106.56115.12127.06138.14181.45170.11184.40199.89216.69
Accounts Receivable --16.07-27.33-231.83-99.0715.15-334.46332.93-41.49-44.98-48.76
Inventories -----------
Accounts Payable -6.062.914.900.3916.572.193.516.667.227.83
Capital Expenditure --14.5018.60-5.03-3.4459.75-30.2825.1212.5013.5514.69
UFCF 667.17708.04775.76640.02854.631,230.11850.931,601.981,322.301,433.371,553.77
WACC
PV UFCF 1,311.52979.50960.71942.29
SUM PV UFCF 6,104.07

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.52
Free cash flow (t + 1) 1,615.92
Terminal Value 24,784.09
Present Value of Terminal Value 15,030.33

Intrinsic Value

Enterprise Value 21,134.40
Net Debt 46.24
Equity Value 21,088.16
Shares Outstanding 359.20
Equity Value Per Share 58.71